Monday, October 13, 2014

Are American communities experiencing “the Great Inversion," i.e. a reversal of fortunes in which cities grow as suburbs decline? While the traditional suburban lifestyle continues to be widespread, new research shows that key features of suburban life not only remain commonplace in the suburbs but are often continued by high-income people even after they move to cities.

Making sense of the story

Using data from Canada's 2006 census on before-tax average income, the researchers grouped the census metropolitan areas into eight "neighborhood types" based on three key variables: homeownership rate, share of population living in a detached single-family house, and share of people who commute by car.

The most interesting finding concerns the "consistently positive relationship between suburban ways of living and higher incomes." Richer people, the researchers found, tend to own single-family homes and drive cars even when they live in highly urbanized neighborhoods.

The study shows that even though there is a diverse range of suburban and urban neighborhoods, the affluent people who live in them lead relatively similar lifestyles.

Consequently, when the rich move back to cities, they take their preferences for and abilities to purchase larger homes or condos and private cars.

The rich are more suburbanized regardless of where these suburban ways of living occur—a downtown condo or a suburban detached home.

Households making $100,000 per year are more than three times as likely to live in suburban rather than urban neighborhoods, whereas households making $0 to $19,900 per year are almost five times less likely to live in suburban as opposed to urban neighborhoods.

As housing costs rise and commuting becomes more arduous, higher income people live closer to the urban core in condos and rentals.